Stressful life events significantly increase the risk of psychotic relapse and depressive exacerbation in people with schizophrenia, but not all individuals respond to stress in the same way. There are differences in reactivity and in individual's typical or "ambient" level of reactivity may change during the course of illness. Nuechterlein, Dawson, Gitlin, and I have proposed a multifactorial model positing that neurocognitive and psychophysiological vulnerability factors and stressful life experience interact with and modify each other over time to produce the characteristic psychotic symptoms of schizophrenia. This study proposes to use a longitudinal, prospective data set of frequently assessed stressful life events, cognitive appraisals of stress, working memory performance and repeated assessment of psychotic symptoms to learn more about stress reactivity and protective factors in the early course of schizophrenia. To address critical issues of predictors of course and outcome, we plan to use innovative biostatistical strategies such as random effects modeling. Our aims are to identify whether there are reliable individual differences in reactivity to stress and to determine if cognitive appraisal of stress is a mediator and a moderator of stress and psychotic symptoms. We propose a model that explains how an interaction among exposure to negative stressful life events, and working memory deficits may influence cognitive appraisal of stress, and the subsequent severity of psychotic symptoms.